If you own a business, knowing how to plan for the future is important. You have to continually set goals, assess your progress and make adjustments as you go -- always with an eye toward your company's long-term prosperity. However, have you started thinking about your company's future after you are gone?
If you haven't got a succession plan in place for your business, you aren't alone. About 58 percent of people who own small businesses don't have one. Most of them are too caught up in their management activities to think about a time where their business may need to run without them.
It's time to get a plan in place. A succession plan for your business is an integral part of your estate planning process. Just like you wouldn't want to leave your spouse and children without a will to guide them, you don't want to leave your business without any form of guidance either.
Not having a succession plan that covers what should happen with your business if you become incapacitated or die could put a strain on your heirs. It could also kill the business you've worked so hard to create.
There are a number of different issues that have to be addressed to have an effective succession plan for your business. For example:
- Is the business organized correctly to pass into your heir's control?
- What tax issues would your heir face during succession?
- What will happen to the business if your heir is unable or unwilling to take charge?
- Who in your family has the aptitude and training to take the lead if you are gone?
- What happens if you are only temporarily incapacitated?
Ultimately, these are only a few of the questions that have to be addressed for a business to survive the death of its founder.
If you want your business to be part of your lasting legacy, a succession plan is essential. Take the time before something happens to talk with your estate planning attorney about how to include your business in your estate plan.